Michel bids to pool EU aid efforts

By David Cronin

Date: 07/04/05

The European Commission will next week set out proposals for improving co-ordination between the various aid schemes overseen by EU governments in developing countries.

Its proposals, to be approved by the 25 commissioners on Tuesday (12 April), are aimed at achieving the goal - contained in the 1992 Maastricht Treaty - of having effective division of tasks in development assistance, but progress has so far been patchy.

Louis Michel, the commissioner for development and humanitarian affairs, does not conceal his frustration at the dearth of co-operation between the aid programmes of the EU executive and those of the member states. Although the Union contributes 55% of all aid given from industrialised countries to poorer ones, he feels that the plethora of different policies and practices means the money is not realising its full potential.

"The true question is European efficiency," he said last month. "The challenge is to know if we are capable of acting in a co-ordinated manner or if we will continue with our 26 programmes, each in our own corner."

Michel envisages a system where groups of governments can pool their aid activities. Member states which have expertise in certain sectors would lead such groups on behalf of the Union. He cites the possibility that the UK could make use of the experience it has gained with education projects.

Mozambique offers a case in point of poor co-ordination. On a per person basis, it has received the highest aid inflows of any country in Africa in recent years. Yet a mere 3% of aid missions there have been undertaken jointly by donors. The number of missions hit 140 in 2003, excluding those conducted by the World Bank.

Development analysts broadly agree that the varying aid criteria and reporting requirements can make aid management unwieldy for donor and recipient alike. The number of donors and creditors to African countries varies from 8 to 65, according to Development Finance International (DFI) in London.

In a study on aid effectiveness prepared for the Commission for Africa, chaired by British premier Tony Blair, DFI said that EU policies generally score well. But it also noted that, of all the donors, the EU has some of the most cumbersome and slow procedures - particularly for tendering.

Some of its findings were echoed by the final report of the Blair Commission. Despite donors recognising the importance of emphasising poverty eradication, it lamented how "the system for allocating aid to African countries remains haphazard, unco-ordinated and unfocused, to a degree that should be unacceptable."

Jeffrey Lewis, manager of the World Bank's finance team, said Michel's proposals could make a tangible difference if properly implemented. He likened the onerous aid criteria to a tax. "Until you have worked in the ministries of developing countries and seen the extent that duplications can be a diversion, you can't appreciate how important greater co-ordination is," he said. "Whatever can be done to reduce how developing countries pay an additional tax makes good sense."

In its yearly global development finance report, published yesterday (6 April), the Bank noted how 60 industrialised and developing countries and 40 aid agencies - both bilateral and multilateral - are involved in discussions on boosting co-ordination between them. Areas of focus could include joint preparation of assistance strategies and joint reviews of aid schemes' implementation.

Jonas Frederiksen from the European Centre for Development Policy Management pointed out that a statement drawn up by the Commission and the Council of Ministers in 2000 listed several priorities for task-sharing but they remain largely elusive.

"Some of the bigger member states want to have freedom and political choice [in devising aid schemes]," he says. "They do not just consider development co-operation as poverty focused aid but also use it for other political aims. Some of the smaller member states say it is not up to donors to decide what to do, it is up to recipients to decide what they want donors to do."

Against this backdrop of conflicting ideas, he said, it may prove difficult to have extensive co-operation. Nevertheless, the Commission might be able to achieve it in such areas as promoting regional integration in the developing world, such as through the African Union. Nevertheless, he argued that far greater co-ordination is required if the EU is to take a lead role in reaching the UN's Millennium Development Goals of halving the rates of extreme poverty in the world within the next decade.

"Events like the catastrophes in Asia and Sudan clearly show the EU must get its act together if it wants to become the global player it says it wants to become," he adds. "The question remains if there's political backing for this and if EU member states will allow the Commission to pursue these ambitions."

Preview of a vote on 12 April 2005 in the European Commission on a proposal by the Commissioner for Development and Humanitarian Affairs, Louis Michel, which aimed at improving co-ordination between the various aid schemes overseen by EU governments in developing countries.